Slowly Killing the Student Loans – May 2013

Student Loan Payoff

I Wish We Could Do This…

If you’re new to Money Life and More, in December 2012 we decided it was time to open up to you, my readers, and shared our very first debt update.

Student Loan Debt Update – May 2013

Another month has flown by and here we are updating you again on our student loan payoff! It isn’t awesome as it could be, but life happens. Tori, my fiancee, is getting paid through her short term disability insurance again. On top of that, our ex future tenant backed out of renting our townhouse. That means we’ll have to spend more to fix it up than originally intended.

Due to all of that fun stuff happening, we haven’t been making any huge payments on the student loans. Hopefully we can get back on track in another month or two!

Once we’re back on track, we’re considering getting one of the best 0% balance transfer credit cards to try to save some money on interest. I think we’d be able to save at least a few hundred dollars that way. It is a tricky move, but we would make sure we don’t transfer more than we can handle.

Private Student Loan 1 – 8.0% Variable

The current balance on this student loan is $4,682.32. This is a decrease of $144.98 since the last debt update. We are paying this loan off first because it has the highest interest rate and is also a variable rate. It originally was well over $20,000 when my fiancee began paying this down after college in 2011.

Federal Student Loan 1 – 6.55% Fixed

The current balance on this student loan is $7,723.11. This is a decrease of $58.11 since the last debt update. This will likely be the 4th student loan we pay off.

Federal Student Loan 2 – 6.55% Fixed

The current balance on this student loan is $7,197.02. This is a decrease of $60.28 since the last debt update. This will probably be the 3rd student loan we pay off.

Federal Student Loan 3 – 6.8% Fixed

The current balance on this student loan is $3,928.00. This is a decrease of $28.55 since the last debt update. This will be the second student loan we pay off because it has the second highest interest rate AND the lowest balance. On top of that, we hate the bank this loan is through so it gives us even more reason to pay it off.

Private Student Loan 2 – 5.75% Variable

The current balance on this student loan is $22,473.43… ouch! This is a decrease of $98.86 since the last debt update. This is the highest balance loan but it has a lower interest rate for now. Unless interest rates start rising we’ll wait to pay this loan off until the federal loans are paid off.

Private Student Loan 3 – 4.75% Variable

The current balance on this student loan is $8,237.26. This is a decrease of $26.70 since the last debt update. This is the lowest interest rate loan and, unless interest rates rise, this will likely be the last loan to be paid off.

Total Balance – $54,177.26 (-$423.25)

As I had mentioned in the past, I had saved a large chunk of money help my fiancee pay her student loans when we combine our finances after we get married! Then plans changed and we decided to use it for a down payment on a house.

We had hoped to have the student loans all paid of by the end of this year but with the changes of plans this has changed to the end of 2016. Hopefully we can beat this goal, but for now 2016 seems most realistic.

Do you have any debt you’re trying to pay off? Do you have a goal for when you want it paid off by?

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.

Comments

  1. I have around $1,100 left owing from my $26,720 student loan, and $7,676 currently owing on my car. I plan on having my student loan gone by the middle of next month, and the car loan knocked out by Christmas. Really hoping to be debt free by the end of the year!

  2. Thanks for the update, Lance! I have a big chunk of change sitting in my business account waiting to pay down the loans….BUT I CAN’T SEEM TO PULL THE TRIGGER! Sounds like you guys have your hands full at the moment, but excited to see the progress as things settle down. Who would have thought killing something would be so much fun? 🙂

  3. Hey Lance, question for you.

    I want to buy a house and it requires a $55k down payment. I don’t have $55k, but I can borrow it at 6.5%. Should I go ahead and do this?

    • Nelson! Welcome to my blog. I know you’re poking fun, but actually, I’d say yes! Assuming, of course, you’re going to pay that 6.5% loan down within the next couple years and you finance the other 80% of your mortgage at a 30 year sub 4% mortgage. If you’re going to buy the house anyway, might as well take advantage of low prices and low interest rates you can get today. If prices or interest rates go up just a little bit you’ll end up paying more over the length of the mortgage in interest than you’d pay on that 55k 6.5% loan for a couple years.

      Anyway, thanks for stopping by!

  4. Kyle @ Debt Free Diaries says:

    My girlfriend and I have about $47,000 in debt combined. Most of this is tied up in student loans and a few are from some not-so-smart decisions we’ve made in our younger years. We are working toward paying them off over the next 5-10 years, with our goal being the end of 2018.

  5. Have you considered paying off your private loans first?

    For starters I would be worried about the interest rate increasing within the next few years.

    Secondly, I’m sure you are well aware of the different Federal loan repayment and forgiveness programs, no private loan has anything comparable. Even if you are paying 1 or 2% more, if you look at it as hardship insurance, isn’t that a good deal?

  6. RubyRuns says:

    I have about $8,600 in student loans left (no other debt) and slowly building my savings and have about $9,500 in there. I love seeing how my savings grew to be more than my debt…wish I could just pay it all off but being single and in an unstable industry I’m afraid I’ll lose my job. For now though it’s nice to know I could pay if I had to.

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